How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3115
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I recently received a lump sum gift from my Mother, I want

Customer Question

I recently received a lump sum gift from my Mother, I want to purchase a property with it and am considering allowing her to live in the property. Do I need to pay income tax or any kind of tax for allowing my Mother to live there?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.

Gifts are outside the scope of UK taxation so there is no problem there.

If you buy a house and allow your mother to live there unless it is your sole or main domestic residence and you reside there also you may well be liable for Capital Gains Tax (CGT) on its disposal at some future undetermined date. You do not incur any tax liability just for letting your mother live in your property.

CGT is a thoroughly nasty tax which has the habit of popping up when one least expects it with serious financial consequences. It is also extremely complicated and its full ramifications are well beyond the scope of your question.

Customer: replied 2 years ago.

Thanks, XXXXX XXXXX question, so just to confirm the house will be my main residence. Does having my Mother live there increase the capital gains I will pay when I decide to sell? The house is only worth 130,000 if that makes any difference.

Expert:  bigduckontax replied 2 years ago.
If you are living there then on the ultimate sale will still be liable to CGT on the gain made, but you would be entitled to Private Residence Relief which is at 100% of any gain and so eliminates it for CGT. Se what I mean about CGT being a thoroughly nasty tax?

If you are living there then presence of your mother is totally and utterly irrelevant.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3115
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your excellent support.
Customer: replied 2 years ago.

Thank you for your previous answers, I feel I need to give you additional information to help clarify .........


The money I will be using to purchase this property was a gift from my Mother (she is ill and wanted me to have her assets), my final question relates to what I saw on HMRC's website regarding 'income tax and pre- owned assets'. Would this be applicable in this case, and if so, what rate would we be liable to pay?

Expert:  bigduckontax replied 2 years ago.
No, but what you tell me does change the situation somewhat should your mother's estate in the event of an unfortunate early death exceed 325K. Please come back yo me if this is a possibility.
Customer: replied 2 years ago.

Thank you, I am completely satisfied with your answer again, 325,000 will not be the case.

Expert:  bigduckontax replied 2 years ago.
Excellent, then we do not have to worry about Potentially Exempt Transfers; frightfully boring.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.